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Category: Consumer Financial Protection Bureau

Posted on Wednesday, January 17 2018 at 12:03 pm by
CFPB Acting Director Mulvaney Announces Call for Public Input Regarding CFPB Functions

By Eamonn K. Moran

On January 17, the Consumer Financial Protection Bureau (CFPB or Bureau) announced that it is soliciting public input “to ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers.”  During the coming weeks, the CFPB will be publishing in the Federal Register a series of Requests for Information (RFIs) seeking comment on the Bureau’s enforcement, supervision, rulemaking, market monitoring, and education activities.  According to the CFPB, these RFIs “will provide an opportunity for the public to submit feedback and suggest ways to improve outcomes for both consumers and covered entities”

“In this New Year, and under new leadership, it is natural for the Bureau to critically examine its policies and practices to ensure they align with the Bureau’s statutory mandate. Moving forward, the Bureau will consistently seek out constructive feedback and welcome ideas for improvement,” stated CFPB Acting Director Mick Mulvaney. “Much can be done to facilitate greater consumer choice and efficient markets, while vigorously enforcing consumer financial law in a way that guarantees due process. I look forward to receiving public comments in response to this call for evidence and encourage all interested parties to participate.”

The CFPB states that its first RFI will seek public comment on Civil Investigative Demands (CIDs), which are issued during an enforcement investigation, and that comments received in response to this RFI will help the Bureau evaluate existing CID processes and procedures, and to determine whether any changes are warranted.

This announcement follows a series of actions taken by the CFPB in recent weeks that demonstrate the influence of the new leadership.  When Mulvaney assumed the role of acting director after Thanksgiving, he imposed a temporary hiring freeze and a freeze on all new regulations and guidance for 30 days, along with a separate freeze on civil penalty payments.  On January 16, the CFPB announced that it intends to engage in a rulemaking process for purposes of reconsideration of the Payday Rule, which was finalized in October 2017.  In a similar fashion, the CFPB announced last month that it intends to engage in a rulemaking to reconsider various aspects of the 2015 Home Mortgage Disclosure Act (HMDA) rule such as the institutional and transactional coverage tests and the rule’s discretionary data points.  We also expect the CFPB to issue a final rule amending certain aspects of its 2016 rule governing prepaid accounts soon.

Stay tuned for further updates and developments!

Posted on Wednesday, December 6 2017 at 9:00 am by
Eamonn Moran Quoted in “Mulvaney Puts Early Stamp on CFPB Tenure With Case Pullbacks,” Bloomberg BNA

Bloomberg’s Chris Bruce discusses the CFPB’s initial moves in pulling back some of its enforcement cases. Eamonn Moran commented on Chris’ article, “Mulvaney Puts Early Stamp on CFPB Tenure With Case Pullbacks.”

Posted on Tuesday, November 28 2017 at 9:00 am by
Showdown Over CFPB Leadership Continues

Written by Eamonn Moran

In an interesting turn of events over Thanksgiving weekend, outgoing Consumer Financial Protection Bureau (CFPB) Director Richard Cordray promoted CFPB Chief of Staff Leandra English to the position of CFPB deputy director on November 24, 2017. This move was intended to allow Ms. English to take advantage of a provision of the Dodd-Frank Act that allows the deputy director of the CFPB to “serve as acting Director in the absence or unavailability of the Director.” The deputy director is appointed by the director, and does not need Senate confirmation. Later on Friday, President Trump announced that he is designating Office of Management and Budget (OMB) Director Mick Mulvaney as acting director of the CFPB, a position he would serve in until a permanent director is nominated and confirmed.

Late Sunday evening, Deputy Director English filed a lawsuit in the U.S. District Court for the District of Columbia seeking to halt President Trump’s appointment of Mulvaney, who is also named in the lawsuit. The Justice Department was expecting to file an order last night responding to the lawsuit. Judge Timothy Kelly, a Trump-appointed judge who was confirmed by the Senate in September, said he would review the Justice Department’s filing and decide on the next steps in the case after that.

The core legal question is whether the President has the authority under the Federal Vacancies Reform Act (FVRA) to designate Mulvaney as the acting director of the CFPB following the resignation of Cordray as of midnight, Friday, November 24, 2017, even if the deputy director otherwise could act under 12 U.S.C. § 5491 (b)(5) [the Dodd-Frank Act]. Mary McLeod, the CFPB’s General Counsel, issued a written memo to CFPB staff on Saturday confirming her oral advice to the CFPB’s senior leadership team that the answer is “yes.” She advised all CFPB personnel “to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB.” Her reasoning was based on statutory language, legislative history, precedent from the Office of Legal Counsel at the Justice Department, and case law, which in her view, “all point to the conclusion that the President may use the Vacancies Reform Act to designate an acting official, even when there is a succession statute under which another official may serve as acting.” As General Counsel for the CFPB, it is McLeod’s legal opinion “that the President possesses the authority to designate an Acting Director for the Bureau under the FVRA, notwithstanding § 5491(b)(5).” The Justice Department’s Office of Legal Counsel supports this position as well, noting that the President “may designate an Acting Director of the CFPB under 5 U.S.C. § 3345 (a)(2) or (3), because both the [Federal] Vacancies Reform Act and the office-specific statute are available to fill a vacancy in that office on an acting basis.”

Mulvaney addressed reporters yesterday afternoon, where he announced a 30-day hiring freeze effective immediately and a 30-day “immediate freeze on any new rules, regulations and guidance.” This could stall, at least temporarily, the CFPB’s debt collection rulemaking, among other projects.

Both Mulvaney and English were present at the CFPB yesterday morning. According to the White House, Mulvaney was given full access to the CFPB director’s office with “full cooperation” from its staff. However, both English and Mulvaney issued dueling emails to staff yesterday morning, and both emails were signed “acting director.” Mulvaney’s email asked CFPB staff to disregard English’s instructions and to inform the CFPB’s general counsel of any communications from her related to Bureau duties. A protest is planned at the CFPB today, and Senator Elizabeth Warren (D-MA) is expected to make remarks. In what appears to be somewhat of an internal resolution, the CFPB’s website currently has Mulvaney listed as Acting Director.

Stay tuned for further updates as additional developments occur!